TaxTMI 
TaxTMI 
2021 (11) TMI 430
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....d January 2008, June 2008, July 2008, September 2008 to December 2008, January 2009 to March 2009, April 2009 to December 2009 and January 2010 to March 2010. 2. The assessee is a partnership firm engaged in the business of execution of civil works in the name and style of M/s S.N. Builders and Developers. The assessee is registered under the provisions of the Karnataka Value Added Tax Act, 2003 ('the Act', for short). The case of the assessee was taken up for audit and re-assessment and was concluded under Section 39 (1) of the Act, 2003 for the tax periods under consideration wherein the assessee was subjected to inter-state purchases to tax after adding 20% gross profit on the purchase value, amongst other additional levies. 3. Bei....
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....racts. No tax liability was discharged on the said inter-state purchases. During the audit proceedings, the same having been discovered, the assessing authority passed a re-assessment order inter alia subjecting the inter-state purchase of goods used in the execution of works contract after adding 20% gross profit on the purchase value. 6. Drawing the attention of the Court to Section 15 (5) (a) of the Act, learned counsel for the Revenue submitted that the words "such value" as found in Section 15 (5) (a) of the Act would refer to the sale value of the goods purchased from outside the State and used in the execution of works contract. The Tribunal grossly erred in holding that the words "such value" found Section 15 (5) (a) of the Act w....
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....1.04.2006. Section 15 (5) (a) of the Act is extracted hereunder for ready reference: "15. Composition of tax: (5) Notwithstanding anything contained in sub-section (1)- (a) a dealer executing works contracts and who purchases or obtains goods from outside the State or from outside the territory of India shall be eligible to opt for composition under sub-section (1) and if the property in such goods (whether as goods or ion some other form) is transferred in any works contract executed by him, the dealer shall be liable to pay tax on the value of such goods at the rate specified in Section 4, and such value shall be deducted from the total consideration of the works contracts executed on which an amount as notified....
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....m, he shall be liable to pay tax on the value of such goods at the rate specified in Section 4 of the Act, 2003 and "such value" shall be deducted from the total amount of the works contracts executed on which tax is payable under sub-section (1) by way of composition in lieu of the tax payable under the Act. 12. In terms of the Section 15 (5) (a) of the Act, a dealer executing works contract has to purchase or obtain goods from outside the state or outside the territory of India. If the property in such goods (whether as goods or in some other form) gets transferred in any works contract executed by the dealer, tax is liable to be paid at the rate specified in Section 4 of the Act on the value of "such goods." Such value shall be deduct....
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....surdity. On the other hand, it two reasonable constructions of a taxing provision are possible, that construction which favours the assessee must be adopted." 16. In the present case, the assessing authority as well as the first appellate authority proceeded to construe Section 15 (5) (a) of the Act inasmuch as the "value of such goods" as the sale value of the transfer of property in goods in any works contract executed by the dealer to bring it within Section 4 of the Act. Thus, the dispute is in a narrow compass as to whether tax is leviable under Section 4, or under Section 15 (5) (a) of the Act with respect to the gross profit earned by the dealer in transferring the goods purchased inter-state or from outside the territory of India....